Why shouldn’t I price my home at whatever I want for it?
I’ve read several good articles lately that explain the need for good comps. Your realtor should be able to provide you with comps to use as the basis for pricing your home correctly. A correctly priced home will sell.
Factors to Consider
Just because another home in your neighborhood sold for a certain price, doesn’t mean your home would command the same price. There are several factors that need to be considered.
Location: If your home is by a major highway, train tracks, or busy thoroughfare, you’ll likely need to adjust your price. Your comps should contain a few houses in similar locations to compare and contrast with your own. The prices for these homes will be affected as well.
The Size & Topography of the Lot: The usability of your lot will determine its value. If you have hilly terrain that a potential buyer cannot build on or use, this needs to be considered. If you have a flat lot that is of similar size to your own, this may be more desirable and therefor command a higher price.
Renovations: Some renovations can affect the value of the home. If other homes in the neighborhood are dated with little upgrades, buyers will lean toward the home that has been spruced up. However, don’t expect to get every penny back you’ve spent on renovations if neighborhood market values are below your perceived value.
Listing Price vs. Sales Price: Understand the difference between the price at which a property was listed and the price at which it was sold. These two numbers can vary wildly in some cases. Your realtor’s comps will reflect the sale price, not the list price. List price is the price desired by a seller, sale price is the actual number he received.
Understanding comps is the first step in bringing your listing to a satisfying conclusion, selling your home.
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Source: “What sellers need to know about comps.” Realtor Magazine, July 2016.